Guest Post: The Experiment Has Failed. Are You Ready?

After about an hour’s worth of air traffic congestion delays around JFK airport, I finally departed New York City yesterday evening en route for Vilnius, Lithuania… one of my favorite inconspicuous corners of Europe.

The route took me through Helsinki, Finland for a brief connection, and I was on the ground long enough to witness something truly bizarre: a complete and utter lack of people.

I could practically count on two hands the number of passengers milling around the airport this morning during peak business hours… it was almost something out of a zombie movie.

Ordinarily I would have seen hundreds, thousands of people… and I have in the past as I’ve traversed this route many times before. And no, today was not a holiday.

Helsinki’s airport functions as a major transfer point, especially for European business travelers criss-crossing the continent or flying to Asia, which makes airport traffic an interesting proxy on the European economy (though not necessarily a reflection of Finland’s).

While a single example is not enough data to draw any significant conclusions, I mentally filed the observation as another snapshot of Europe’s deteriorating economic situation.

It reinforces what I observed here several months ago when I was last on the continent in April; it was as if a dark cloud was hanging overhead, and the general mood was absolutely sour. People seemed to be capitulating all hope and starting to make peace with the fact that their economic futures have been squandered by a stupid experiment.

Of course, I’m referring specifically to the ‘euro experiment’… however the euro is merely a symptom of a much larger experiment– that of fiat currency.

It wasn’t all that long ago that money was actually made of something scarce– a real asset that couldn’t be conjured at will by an appointed bureaucrat.

In time, money supplies grew to be controlled by governments and banking cartels in the form of worthless pieces of paper. Since then, it’s devolved further to strings of bits in a giant database; our money supply is nearly all digital.

As my friend Tim Price characterizes it, what passes as ‘money’ today is merely an abstraction of an abstraction of the real thing.

The euro experiment was merely a commingling of 17 different national fiat experiments… albeit a remarkably stupid one.

Under the normal fiat game, a country would at least have to stand on its own two feet and con(vince) the market that its particular brand of monopoly money was sound.

With the euro, even the trashiest economies in Europe were able to pass off Germany’s credibility as their own. And now, finally, after more than a decade, the market is calling that ridiculous bluff.

Spanish bond yields have risen to a euro-era record, well north of 7%. Italian bond yields are 6%. The talking heads on financial news are going bonkers… nobody can fathom these countries staying afloat with interest rates being so ‘high’. And they’re right.

What’s funny is that the 20-year average of Italian 10-year bond yields since 1993 is 5.9%. They’re currently priced at 6.06%. Italian bond yields aren’t spiking, they’re just reverting to the mean. The real spike hasn’t happened yet.

Italy is in such dismal shape that having to borrow funds at ‘average’ rates is going to push it into insolvency… the government can only limp along if it can borrow at absurdly low rates that don’t even keep pace with inflation.

Perhaps more than anything, this shows how truly broken the system has become… and what a colossal failure the experiment has been.

Of course, before things completely break down, they’ll resort to the same old tactics that bankrupt governments have relied on in the past–outright confiscation of wealth, capital controls, and financial repression.

It’s already happening across the continent, in fact.

In Greece, the government is helping itself to people’s savings at will, in their sole discretion… and forcing businesses to ‘prove’ the tax purity of their funds.

In Italy, the government has colluded with several banks (like BNI) to freeze customers out of their accounts with no warning or explanation.

ATM limits are being imposed at many banks across the continent, and Euro leaders are openly discussing more severe controls to stem potential capital flight.

The conclusion to draw from all of this is clear: finance the government, save the banks, screw the people. This reality, coming soon to a western civilization near you.

Maybe the observation is telling him something about galavanting around like he's Branson on vacay. Like I better keep my ass away from unusually empty airports during economic upheavals? Kinda reminds me of right after an 9.0 earthquake 1,000 miles away if you stand on the beach and watch the unexpected oddity of the tide going out at about 70 mph then just maybe it's time to head for higher ground. Well ya know observational genius comes in many forms. Some of it even as common sense.

"Mid-30s is also when people are just before their mid-life crisis. They have more or less found out who they are, they can sort of see the limit of their potential, and it leads to disenchantment, disillusionment. 'I will not become the next Richard Branson', they realise. "At the same time they see that all good intentions aside, the world is tough place, and you need to be tough to survive and succeed. This is the age when you see people suddenly become serious. They have lost their innocence.

How so many brilliant, arrogant, super-talented young people get abused, sucked dry, burned out and then tossed aside by corporations and banks. In the early days of capitalism it seems the game was to exploit the less gifted; miners, factory workers etc. Today it's about taking advantage of talent. People are used, then discarded. Especially these days with the crisis. Fear rules supreme. You can get fired any moment, five minutes and you're gone.

"For psychologists like me the world of finance is very interesting, if only in purely clinical terms. You're a CEO and you pay yourself £8m. Now, look at the kind of organisation you need to put in place in order to make that amount … It's almost dirty.

"It gets more interesting still when your company has failed on a range of issues, and at the end of the year you still pay yourself those £8m. There's an outcry but you say: 'it's in my contract'. Now, take a step back, how has that £8m become so important to you that you can't even see why you shouldn't get them? Apparently your need for the money is so strong you stop registering the anger you provoke.

"Those CEOs and managing directors at banks with their millions … They deserve our pity, really. They are the victims of their own twisted minds. And it will bring them down. Whether you are a paedophile or pervert or control freak or psychopath; sooner or later a twisted mind will turn on itself.

amoral bordering on the immoral

"It's almost a perversion. The CEOs such as Fred Goodwin and Jamie Dimon and the like. They present themselves as to the outside world as posh and erudite and sophisticated; as supermen. But they are just like you and me, with similar needs and fears. We shouldn't fall for their spiel. .......they are not worth millions

Suggestion. Upon conviction the guilty party is assessed by 3 independant organ harvesting "bidders of interest" who have themselves submitted the 3 highest bids in an open process. Clearly the bidders would account for age, health and probability of matching.

The highest bid would surely make maximum use of the "guilty party", obviously the heart would be last. The irony.

For what it's worth, I know someone who traveled to Madrid on business within the last month. He met a business partner for dinner at one of the most respected restaurants in the city. As their meals were served, they looked around and realized they were the only patrons. A handful of other patrons filtered in as they finished their meals. When they left there were only 5 other people in the restaurant.

I am seeing this sh*t in the USA. Restaurants and stores pretty much empty. Anything to do with bedding or furniture is going out of business. Even places like Taco Bell and McDonalds (gag) are fairly empty even though they take WIC cards aka Obama bux.

I have avoided airports because I don't want the Coach Sandusky routine from TSA.

I have heard that the price of silver does not corroborate to gold because there is a lot of silver in other forms that people will run to melt down and buffer anything that would begin to look like scarcity. So Silver, though the point of entry is lower, will not keep parity with gold -- not just because the market-makers control the price, but because of the floods that ballast it. What do you think? Have you heard anytihng similar?

Yes, because when I was born in 1980 I had SO MUCH influence on that deal. And my single vote, diluted and malformed via constant congressional redistricting and the electoral college has allowed me so much control over current fiscal policy.

You must be right, mine and every generation since should be punished remorselessly for being born into a corrupt and broken system clearly controlled by vast wealth pooled decades before even my parents were born.

Just lashing out because what else is there to do? The show is so rigged and the sheep so enthralled by the propaganda that it seems impossible to correct the problems anymore.

It's hard enough "waking up" in this environment, then once you do it takes more time to realize how ineffective most attempts at reform are, or have become, under new technological means of brainwashing and repression.

It seems the best one can do is to provide and prepare for self and family, educate those we meet who may yet be woken (few and far between), and hope to collect enough momentum with like minds to someday return to sane principles. It's like trying to accrete a planet from stellar dust while being told it's your fault that entropy exists.

Wasn't actually meant as an insult, just the most direct approach to a real solution. I left that sinking shit-ship 16 years ago, and that decision ranks among the best I've made in my life.

If I was inclined to be selfish or insulting, I could say something like, "on second thought, one of the great things about the world is that the insufferable USuckAss-ians are mostly contained in one place and don't, presently, pollute the rest of the world to saturation with their presence... So, carry on then--stay exactly where you are and continue doing exactly as you're already doing--traveling isn't worth it, and generally speaking, the world is better, more enjoyable place when Americans stay in America."

Don't feel like the Lone Ranger. I'm a boomer who keeps getting blamed for FDR's bullshit like we went back in history and fucked things up for every generation born since yours.

Yea, I suppose we could have paid better attention, but the pre-internet days only fed us a diet of MSM bullshit...like God Bless the Fed, and Be proud to die in order to kill Commies, and What's good for General Motors is good for the Country...

Well, instead of blaming you for "FDR's bullshit", how about we just agree to your complicity in financially subsidizing the military industrial complex's perpetual wars for your decades as a tax-payer and give you a share of ownership in the numerous genocides that have been perpetrated on your behalf as a war-supporter, regardless of whether you were brain-washed or intimidated into it or not.

If you don't agree, then go to Saigon or Phnom Penh and visit the war museums; see what you paid for back in the day. Maybe someday there will be similar museums in Kabul and Baghdad; won't your grandkids be proud of you as a lawful, patriotic tax-payer when they visit those museums!

It does matter which second one you could get. The only easy one I (an American) could get would be Peru. Frying pan into the fire? At least we would have a relatively decent life there. Peru is our Plab B.

Because you've checked the requirements for ALL the other countries? I'm not saying there's anything wrong with Peru as plan B (except maybe the USuckAss as plan A), but there are certainly many viable, quality options for those with minds open enough to consider them.

After the latest Mark Grant 'contribution' Simon wanted to make sure he was not outdone for the biggest vox nihili award. We anxiously await the next Brusca piece to finally knight the prince of nonsense.

I ain't gettin' no traffic past that patch of land in Paraguay I'm renting from Jenna Bush either. What am I supposed to do with all those vegetables? Maybe if I moved to one of those abandoned cities in China, I could get a reduction in rent? Although, I would probably have to rent it from Jenna Bush, so I don't know how that works out. Simon, give me some fucking news I can use instead of all this travel bullshit. Yea, Europe is a mess - thanks for the tip.

It isn't just European airports, it is everywhere. The cost of airline travel has skyrocketed and nobody is going anywhere except for business travel.

Six months ago I could fly to one of my major accounts for $275. The ticket is now $689, booked a month in advance. You think a family of four is going to fly to Orlando to visit Disney World when a ticket is $450 per person?

If you go to Pittsburgh's airport you could show up 15 minutes before takeoff and still get on your plane. Even Charlotte is sparse, Detroit's airport is starting to look like the rest of the city.

The interstates are pretty low with car volume, but are packed to the gills with trucks carrying all that unsold channel stuffed inventory around. My local Walmart hasn't even bothered restocking the shelves. I'm thinking Best Buy will let me pay $100 for a $2000 TV soon just so they can say they sold one.

Maybe it's just my area, but I am seeing many (larger) boats with big "For Sale" signs on the side. By larger I mean 25 to 35 (or more) feet, not the smaller Boston Whaler size. In fact I see very few of the smaller boats for sale on the side of the road.

What is weird is if you watch YouTube videos on Detroit after the implosion - you see garbage everywhere including old boats dumped everywhere. Probably owned by ex GM plant workers. Usually 16 to 22 foot lake/ski boats and a few bigger ones.

I was shocked traveling out of Detroit a few weeks ago. Monday morning, 10AM. Place should have been packed. I would guess I saw 40% of the people I saw 10 years ago. This is a newly remodeled airport. You could have filmed a movie.

Traffic here in the DC suburbs has generally subsided as well ... unless, of course, any form or amount of water falls from the sky. In that case, local tradition requires people to immediately crash into the car in front of them and leave the two vehicles in the roadway while they argue and until a representative of the law can get some flashing lights going for everyone to gawk at.

I recently flew from my city to another US city to visit our kid and family friends. I then flew on to Seoul, Korea via SF. After a week in Korea I flew to Osaka, Japan. Two days later back to SF and my hometown.

Months ago I asked our travel agent to give me a guesstimate of the cost of the air travel: $4000. I then told her I need lowest price nothing else. OK, $1800. Most of the trip was on United (supposedly the worst airline to Asia).

At arrival in Incheon (Seoul) and departure, the airport was pretty quiet, but I had never been before. Osaka's airport was quiet as well, arrival and departure. Both apparently well under capacity. And both were beautiful airports. But my flights were all full...

SF's airport was maybe half-way busy, both arrival and departure both times.

Well, your day topped mine. Just got back from Spokane attending my daughter's college graduation. I can attest to the heavy crowds at the San Diego airport, TSA gropers in full molestation mode and scanners irradiating non stop. My younger daughter was pulled aside for the "special" screening (she's blond and buxom). Let's just say I'm thankful mr Miffed didn't get us arrested or linked on Drudge but I was worried for a minute. Your Shreveport night sounded magical but after this last trip I'm afraid to get mr miffed near a plane. Looks like we're limited to driving or walking for our next vacation.

Opponents of "socialism" never look at the alternative. Feudalism, aristocracies, oligarchs and so on. We don't have socialism in a nation that can afford to compensate executives tens of millions p.a. for 1 person, for 1 type of job. Think about it.

What we're being sold as socialism is really just a bandaid to keep the people happy and quiet. That's the one important lesson the power elite has learned from past mistakes. If the power elite was honest, they would at least admit to themselves that they're simply stealing from everyone else and sitting at the top of the pile because millions of slaves, drones, consumers, voters or whatever are pacified and supporting them. Some will admit that to themselves, the majority is ignorant and thinks they're deserving.

I was at ORD Saturday and it was wall to wall people. Lines forever, missed flight and got bumped from the next flight. I didn't see any signs of an economic slow dow there. All restaurants and bars packed. I have been flying the same route from ORD to IAH for two years. Prices haven't changed much nor the amount of people flying. I wish less people would fly as it would make my tolerance for flying better. I hate flying airlines!

What we are witnessing is a currency war between the fed and euro. The euro is also the reserve money of Europe without a country. For all the people that want the dollar pegged to gold and think it’s a pipe dream and then want to see the euro fail also? For what? The euro is the feds nightmare and that’s OK with me!

Scandis have their summer holidays usually either in June or July. Midsummer festivals (remember, nightless nights up there during summers, like in Alaska) are around June 21st to 24th, so that is why there were not many people around in Helsinki airport, even a week before the festivals. Almost everybody go to the country side near lakes to summer cottages to have a party or to the festivals. Cities feel quite deserted during that time.